New Century Logistics (BVI) Ltd

Hong Kong freight forwarder with roughly one quarter of cash left and a sharp swing to a ~$10.7M net loss.

Strengths

• Still-positive current/quick ratio (~1.47) and an established 20+ year forwarding network
• Revenue base near $44M provides some operating scale

Risks

• Cash runway ~0.7 quarters (12th pct); ROA -73%, ROE -202%, interest coverage -530
• Revenue down ~16%, near-zero gross margin (~11th pct), reverse split and dilution; near cash-out

Notable findings

• No interest coverageInterest coverage -529.75 (cannot cover interest)
• Net lossNet loss (net margin -24.2%)
• Cash burnNegative free cash flow (-3.5M)
• Material weaknessIf we fail to implement and maintain an effective system of internal controls or fail to remediate the material weaknesses in our internal control over financial reporting that have been identified,
• Customer concentration~82% of revenue from one customer/distributor — 82% of our total revenue for year ended September 30, 2023, respectively
• Revenue declineRevenue -15.5% YoY